J.H. Cullum Clark is the director of the Bush Institute-Southern Methodist University Economic Growth Initiative. In this guest column, Clark dispels myths about whether a college degree pays off. It does, he says.
Distributed by InsideSources.com, a longer version of this essay originally appeared in “The Catalyst: A Journal of Ideas from the Bush Institute.”
By J.H. Cullum Clark
Like the film “Four Weddings and a Funeral,” today’s narratives on higher education contain both happy and unhappy elements, five of which can be summarized as “four myths and a truth.”
Myth number one is that most college students major in esoteric fields that do little to enhance their career prospects. The truth: More than 60% of 2021 four-year college graduates majored in STEM, business or other technical fields associated with in-demand, high-paying jobs, based on Bush Institute analysis of U.S. Department of Education statistics.
A second myth is that growing proportions of graduates are stuck in low-paying jobs that don’t require a bachelor’s degree. According to Bureau of Labor Statistics data, the share of graduates who fit this description has held steady at 10% to 15% for decades.
Myth number three is that the college premium — the additional earnings of bachelor’s degree graduates over people with only a high school diploma — is due to the “signaling” effect people convey to employers rather than what they learn while enrolled. The truth: Two-thirds of the college premium reflects skills learned or enhanced in college, according to research by University of Pennsylvania economist Hanming Fang.
A fourth myth is that most students could attain the same wages through non-degree industry-recognized certifications rather than bachelor’s or two-year associate degree programs.
A 2022 University of Texas at Austin study of young Texas workers found that certain in-demand industry-recognized certifications deliver a 10% to 15% premium over the average high school graduate’s wages, while most IRCs bring no wage benefit in the absence of a postsecondary degree.
But higher education narratives contain one important truth: More and more people are joining living wage, upwardly mobile occupations based on two-year associate degrees. The number of such workers has grown more than 80% since 1991.
Contrary to narratives presented by college skeptics, young workers continue to enjoy the earnings benefits of college degrees. Bachelor’s graduates between the ages of 22 and 27 earn approximately 70% more than peers who stopped after high school, according to a 2022 Pew Research study.
And the benefits extend to others. People with lower education levels earn more in metropolitan areas with high population shares holding a bachelor’s degree or higher since high education levels make these places productive for everyone.
These facts make a strong, though qualified, economic case for college. Benefits easily exceed costs — provided students learn useful, in-demand skills, preferably in programs associated with well-defined career pathways.
Only 30% of young people from families earning less than $50,000 enroll in four-year institutions, compared with 80% of families earning more than $100,000. Just 70% of students attending four-year colleges graduate within six years.
At two-year colleges, most never earn a degree or credential, according to Brookings. For community college students from families in the lowest-income fifth of the population, the completion rate is just 9%
Studies point to barriers standing in the way of college enrollment and completion for many low-to-moderate-income students:
— Information: Many high schoolers have inadequate information on opportunities and pathways for accessing them. College students often face too many choices with little advice or clarity regarding career paths.
— Physical access: Most low-income students travel less than 70 miles from home for college, which means people without nearby options are less likely to enroll and persist.
— Money: Despite America’s generous financial aid programs, the top reasons young people give for not enrolling are that they can’t afford it and must work.
Twenty-first-century America needs a higher education sector offering a fast-changing, kaleidoscopic range of programs that prepare students of all backgrounds for many evolving occupations.
Federal and state policymakers should create funding streams for colleges and universities to develop clear career pathways, link lending policies to student majors, and promote alternative accreditation systems to invite disruptive innovators into the postsecondary ecosystem.
As for higher education institutions, America’s colleges and universities are in the fifth inning of a long evolution. They are evolving away from their origins as elite institutions preparing homogeneous student bodies for a handful of occupations and toward a future as innovative engines of talent development and upward mobility for a diverse society of lifelong learners.
From the land-grant university system initiated under Abraham Lincoln to the GI Bill and the Pell Grant program, expanding college access has been a cornerstone of American public policy and a towering success. America should double down on this longtime commitment because college remains an excellent bet even as it evolves.
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